2024-01-09 20:59

CAIRO, Jan 9 (Reuters) - Yemen's Houthi group Ansarullah targeted a vessel in the Red Sea, a Yemeni military source told Al Jazeera on Tuesday. Earlier on Tuesday, the United Kingdom Maritime Trade Operations (UKMTO) organization received a report of an incident in the Red Sea approximately 50 nautical miles west of Yemen's Hodeidah. Yemen's Iranian-backed Houthi militants have stepped up attacks on commercial vessels in the Red Sea in protest against Israel's war in Gaza. Various shipping lines have suspended operations, instead taking the longer journey around Africa. The Houthis have vowed to continue attacks until Israel halts the conflict in Gaza, and warned that it would attack U.S. warships if the militia group itself was targeted. https://www.reuters.com/world/middle-east/yemens-houthis-target-vessel-red-sea-yemeni-military-source-told-al-jazeera-2024-01-09/

2024-01-09 20:55

MEXICO CITY, Jan 9 (Reuters) - Tests were negative for traces of salmonella at a cantaloupe-processing plant in Mexico amid an investigation into a deadly outbreak in the United States and Canada, Mexico said on Tuesday. Mexican health officials in December ordered the temporary closure of the plant in the northern state of Sonora and took samples from surfaces and water. Those samples were analyzed by a laboratory and did not detect the presence of salmonella strains, Mexican agriculture and health authorities said in a statement. A new analysis of water, product and surface samples in production and packaging plants will be carried out in February, the statement added. At least 11 deaths in the United States and Canada have been linked to the outbreak. Four deaths were reported by the U.S. Centers for Disease Control and Prevention (CDC) and seven were reported by Canada's public health agency (PHAC). Health authorities in both countries have implicated Mexico's Malichita- and Rudy-branded cantaloupes as the sources of the outbreak and issued recalls of the fruit. https://www.reuters.com/world/americas/salmonella-tests-negative-mexico-cantaloupe-plant-amid-outbreak-officials-2024-01-09/

2024-01-09 20:41

NEW YORK, Jan 9 (Reuters) - U.S. banking giants are expected to report lower profits for the fourth quarter after they set money aside to cover souring loans while also paying more to depositors. The largest banks' net interest income (NII) - or the difference between what they earn on loans and pay out on deposits - probably fell on average 10% in the fourth quarter, Goldman Sachs analysts said. An estimated 15% decline in trading revenue will also weigh on earnings, they said. JPMorgan Chase (JPM.N), Bank of America (BAC.N), Citigroup (C.N) and Wells Fargo (WFC.N) report fourth-quarter and full year results on Friday. Banks' profits will likely be squeezed as they set aside more reserves in the fourth quarter to prepare for customers to default on the loans. Profits could also be curbed by banks paying more to keep depositors' money in their accounts. Bank of America's earnings per share (EPS) are expected to drop 23% in the fourth quarter versus a year earlier, while EPS at Citigroup and Morgan Stanley will fall 25% and 17%, respectively, according to analyst estimates compiled by LSEG. EPS is predicted to slide 3% for JPMorgan and 2% for Goldman Sachs. By contrast, earnings at Wells Fargo will benefit from a reduction in expenses, including some related to regulatory orders. Separately, Citigroup investors will look for signs that its sweeping overhaul will raise returns. And Morgan Stanley's new CEO Ted Pick will provide a strategy update, his first since taking the helm at the start of the year. The largest banks are also expected to book charges to replenish a Federal Deposit Insurance Corp fund after it was drained by the collapses of Silicon Valley Bank and Signature Bank. "There is a lot of macroeconomic uncertainty now and it's hard to predict the trajectory for net interest income," said Bank of America analyst Ebrahim Poonawala. He cited the debate about the potential pace of Federal Reserve interest rate cuts this year as one of the key questions hanging over markets. The health of the U.S. consumer is also in focus as lower-income customers fall behind on payments in greater numbers. Although delinquencies are increasing, the strong job market has kept a lid on loan defaults, Poonawala added. Last year was a strong year for bank profits despite the expected slump in fourth quarter net income. Earnings at the largest banks probably rose 5%, compared with a 5% decline for regional banks, Poonawala estimated. The KBW index of banks stocks fell 5.4% last year and accumulates a 0.7% drop in the first days of 2024. "I think 2024 will be a transition year, and will set the stage for the resumption of higher loan growth in 2025," said Jason Goldberg, an analyst at Barclays. Looking ahead, the slide in NII in the fourth quarter could extend into the first half of this year as banks tighten their lending standards while lower income consumers' finances become increasingly stretched, Goldman banking analyst Richard Ramsden said. "We could have the opposite effect on the second half as interest rates go down," he added. Banks are expected to conserve capital this year and stay cautious on buying back their own shares as they brace for potentially stricter rules known as the Basel endgame that are open for public comment, analysts said. The upcoming U.S. presidential election could also change the direction of regulation. Banks had been accumulating paper losses in their portfolios because they held securities that lost value when interest rates rose. As the Fed moves closer to reducing rates, the securities portfolios will regain value, helping to bolster banks' capital, Goldman's Ramsden said. EARNINGS PER SHARE IN 4Q * LSEG mean estimates https://www.reuters.com/business/finance/us-banks-profits-shrink-they-brace-souring-loans-2024-01-09/

2024-01-09 19:54

Canadian dollar weakens 0.4% against the greenback Touches a near four-week low at 1.3414 Canada's trade surplus narrows in November 10-year yield eases 2.8 basis points TORONTO, Jan 9 (Reuters) - The Canadian dollar fell to a near four-week low against its broadly stronger U.S. counterpart on Tuesday as investors weighed recent signs that the domestic economy is particularly sensitive to higher borrowing costs. The loonie was trading 0.4% lower at 1.3395 to the greenback, or 74.65 U.S. cents, after touching its weakest intraday level since Dec. 15 at 1.3414. "You can see the stress and the drag from monetary policy more clearly in Canada (than in the U.S.)," said Aaron Hurd, senior portfolio manager in the currency group at State Street Global Advisors. "I think that creates a consistent backdrop that biases the Canadian dollar weaker." Canadians borrowed heavily during the pandemic to participate in a red-hot housing market. The BoC has said that a slowdown in the domestic economy is an indication that its monetary policy is working. Money markets expect the central bank to cut its benchmark interest rate in April after holding it at a 22-year high of 5% for a third straight policy meeting in December. Canada's trade surplus narrowed to C$1.6 billion in November from C$3.2 billion in October as precious metals led the first decline in exports in five months, data from Statistics Canada showed. Separate data showed the value of Canadian building permits falling by 3.9% in November from October. The U.S. dollar (.DXY) rallied against a basket of major currencies ahead of U.S. inflation data on Thursday that could offer clues on the Federal Reserve policy outlook. The price of oil, one of Canada's major exports, clawed back much of the previous day's heavy losses, supported by a Libyan supply outage and concern the Middle East conflict could widen. U.S. crude oil futures settled 2.1% higher at $72.24 a barrel. The Canadian 10-year yield was down 2.8 basis points at 3.218%. https://www.reuters.com/markets/currencies/c-slips-investors-eye-economys-reaction-rate-hikes-2024-01-09/

2024-01-09 19:51

Jan 9 (Reuters) - A massive winter storm moving across the eastern half of the U.S. on Tuesday knocked out power to about 811,000 homes and businesses in 12 states ahead of a brutal freeze expected to blanket the region starting this weekend. The hardest hit states so far are New York and Pennsylvania, each with about 182,000 power outages, and New Jersey with over 127,000 outages, according to data from PowerOutage.us. The biggest power companies in those states are units of Con Edison (ED.N) in New York, FirstEnergy (FE.N) in Pennsylvania and Public Service Electric and Gas, a subsidiary of The Public Service Enterprise Group (PEG.N) in New Jersey. Extreme weather is a reminder of the February freeze in 2021 that left millions in Texas and other U.S. Central states without power, water and heat for days, and a winter storm in December 2022 - known as Elliott in the energy industry - that almost caused the collapse of power and natural gas systems in parts of the eastern half of the country. The current storm is covering most of the country east of the Mississippi River, according to AccuWeather.com. It is moving toward the U.S. Northeast. The storm is coming ahead of what will likely be the nation's coldest weather since December 2022, according to data from financial firm LSEG. LSEG projected gas demand, used to heat about half the homes in the country, would reach a daily record of 170.0 billion cubic feet per day (bcfd) on Jan. 15 and 173.7 bcfd on Jan. 16. Traders noted it would be unusual for gas use to hit a record on Jan. 15 since it is the U.S. Martin Luther King Day holiday when many businesses and government offices will be shut for a long weekend. If correct, gas demand, including exports, on Jan. 15 and 16 would top the current daily record of 162.5 bcfd set on Dec. 23, 2022, according to federal energy data from S&P Global Commodities Insights. One billion cubic feet is enough gas to fuel about 5 million U.S. homes for a day. Despite the coming cold, spot power and gas prices have not reacted much to the current storm, but gas futures have soared about 30% over the past six days and were trading at a two-month high of around $3.25 per million British thermal units. DECEMBER 2022 STORM The December 2022 storm caused some energy companies, including the Tennessee Valley Authority and Duke, to impose rotating outages to maintain electric reliability after dozens of power plants failed to operate. Gas flows into pipelines were also reduced during that storm, as output declined due in part to the freezing of gas wells, pipes and other equipment. At the same time, demand for gas for heating and power generation soared, dramatically lowering line pressures. In New York City, Consolidated Edison was forced to declare an emergency because it faced a gas system collapse that would have taken "many months" to restore service in the middle of the winter. https://www.reuters.com/world/us/massive-winter-storm-batters-us-knocks-out-power-over-300000-customers-2024-01-09/

2024-01-09 19:29

BERLIN, Jan 9 (Reuters) - A multi-day strike by German train drivers can go ahead as planned this week, a court ruled on Tuesday, dashing a last-ditch attempt by Deutsche Bahn to prevent the walkout that will severely disrupt rail travel across the country. The labour court in the state of Hesse ruled against issuing an injunction, upholding a lower court's decision. The GDL train drivers' union plans to strike from the early hours of Wednesday until Friday evening, forcing the national rail operator to run only stripped back emergency timetables. Cargo train drivers are also striking from Tuesday evening until Friday. Deutsche Bahn has said the strike action would impact the travel plans of millions and has encouraged people to cancel or postpone all non-essential travel. The long-running row over pay and working hours has flared up again following a truce over Christmas, with the GDL seeking a 35-hour week on current wages. Deutsche Bahn has offered flexibility on working hours but refused to reduce them without a pay cut. https://www.reuters.com/world/europe/german-rail-strikes-can-go-ahead-court-rules-2024-01-09/